Superior Plus Announces 2017 Third Quarter Results

Superior Plus (TSX:SPB) has announced its financial and operating results for the three months ended September 30, 2017.
As quoted in the press release:

All financial figures are expressed in Canadian dollars.
“Superior has made significant progress in 2017 towards achieving our Evolution 2020 goal of increasing 2016 EBITDA from operations in the range of $50 million to $150 million by the end of 2020. The anticipated EBITDA contribution from the acquisition of Canwest Propane, including synergies, the five tuck-in acquisitions completed in our Energy Distribution and Specialty Chemicals businesses and the improvement in the chlor-alkali markets experienced in 2017 moves us solidly towards the higher end of the range,” said Luc Desjardins, Superior’s President and Chief Executive Officer. “We were pleased to complete the acquisition of Canwest Propane during the third quarter with a favourable outcome from the Competition Bureau review and the ability to deliver on the estimated run-rate synergies of $20 million within 20 months of closing.”
Financial Highlights

• Achieved Adjusted Operating Cash Flow (“AOCF”) per share before transaction and other costs of $0.11, an 83% increase over the prior year quarter of $0.06 per share due to higher Adjusted EBITDA, offset in part by higher interest expense.
• Adjusted EBITDA increased $11.4 million or 65% over the prior year quarter due to realized gains on foreign exchange hedging contracts compared to realized losses in the prior year quarter, higher EBITDA from operations for Specialty Chemicals, income associated with the Canwest Propane transaction and lower corporate costs, partially offset by lower EBITDA from operations for Energy Distribution.
• EBITDA from operations for the Specialty Chemicals business increased $4.3 million compared to the prior year quarter primarily due to higher chlor-alkali gross profit related to increased demand, partially offset by higher operating costs.
• EBITDA from operations for the Energy Distribution business decreased $3.7 million compared to the prior year quarter primarily due to lower gross profit in the supply portfolio management segment of Canadian propane distribution related to weaker market fundamentals and modestly lower gross profit in the U.S. refined fuels (“USRF”) business related to the impact of the stronger Canadian dollar on U.S. denominated gross profit.
• On August 1, 2017 Superior entered into an agreement with the Canada Revenue Agency (the “CRA”) regarding its objection to the tax consequences of Superior’s corporate conversion transaction on December 31, 2008. Following the quarter end, Superior received approximately $26 million in refunds from the CRA and the remaining $7 million from provincial tax agencies is anticipated to be refunded in the fourth quarter of 2017.

Strategic Growth and Evolution 2020 Initiatives

• On August 1, 2017, Superior Plus Energy Services Inc., a subsidiary of Superior closed the acquisition of the assets of Yankee Propane Inc. (“Yankee”) and Virginia Propane Inc. (“Virginia”) for an aggregate purchase price of approximately US $31.5 million.
• On September 27, 2017 Superior received Competition Bureau approval for the acquisition of Canwest Propane (“Canwest”) and closed on the acquisition of Canwest. As part of the consent agreement with the Competition Bureau, Superior agreed to divest 14 locations from the combined Superior Propane and Canwest footprint. The estimated impact from the required divestitures is less than 5% of the Canwest Adjusted EBITDA based on the trailing twelve months ended June 30, 2017.
• On October 2, 2017, Superior Plus Energy Services Inc., closed the acquisition of the propane distribution assets of R.W. Earhart for an aggregate purchase price of US $38.0 million. The acquisition of R.W. Earhart is anticipated to add approximately 12,600 residential and commercial customers and 47.3 million litres of retail propane sales in Ohio, a new region for Superior’s Energy Distribution business.
• On October 31, 2017, Superior Plus U.S. Holding Inc., a subsidiary of Superior Plus LP, closed the acquisition of International Dioxcide. Inc. (“IDI”) from the LANXESS Corporation. The IDI acquisition was Superior’s fifth tuck-in during 2017, exceeding Superior’s Evolution 2020 goal of 2 – 4 tuck-ins per year.

Click here to read the full press release.